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| China issues draft on tracking foreign loans |
SHANGHAI, Oct. 26 -- China has issued draft rules to tighten oversight of borrowing from foreign governments as part of bids to curb mounting capital inflows without damping the nation's economic growth.
Any domestic project involving loans from foreign governments must gain approval from the National Development & Reform Commission and the Ministry of Finance after receiving permission from local governments, the top economic planner said on its Website.
The rules, effective from November 9, will also grant the NDRC the power to assign loan quotas and set a one-year deadline for project managers to obtain permission for the foreign debt from state agencies.
"The move is aimed at streamlining management of debt from foreign governments and bolstering the better use of the loans," the NDRC said in a statement.
China's foreign debt edged up 6.01 percent from last year's end through June 30 to US$297.9 billion after the central government acted to head off speculative capital influx.
The country's total overseas borrowing picked up 13.6 percent last year and 18.6 percent in 2004, spurred by an investment boom and a stronger local currency.
China started in 2004 to order banks to restrict irregular borrowing activities from overseas by verifying projects' capital needs and checking borrowers' identities.
Commercial banks must set up special accounts for inbound money exceeding US$200,000, a move that can help regulators better monitor foreign currency movements.
China's economy rose 10.4 percent in the third quarter after jumping 11.3 percent during the April-June period as government efforts to cool investment took effect.
However, the country still had foreign exchange reserves of US$987.9 billion at the end of last month, the world's biggest for a single country or region.
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